When it comes to inherited wealth, we all have dreams of being on the (fortunate) receiving end. We seldom have to face the (possible) nightmare of being on the bequeathing end.
It’s often obvious who you’re going to give your money to when you die. Once you’ve made that decision, you then need to decide the tricky part: how you’re going to give it to them.
You want your legacy to benefit your heirs, not burden them. But too often a windfall opens the floodgates to conspicuous consumption, bad behavior, idleness, lack of purpose, and poor choices.
So what’s a responsible parent to do?
A recent article from The Telegraph has some suggestions. Keep in mind some of these suggestions are framed in the context of British law, so a conversation with your local family attorney will be essential.
Still, I found the considerations well-founded. Personally, I was the beneficiary of a ‘spendthrift’ trust, which allowed for an annual distribution of only 5% of the total amount in the trust. This kept the bulk of the principle in place for the long term. Very astute of my parents. They knew their son.
I’d like to hear your experience…as an heir, and as someone who’s going to bequeath your heirs money, real estate, or other valuables, or as an executor, someone responsible for the estate of another.
What are your plans? Have you written your will? Are you going to put restrictions or conditions upon your heirs?
Let me know.
Thanks.
- BGT